Forex Market Review – Euro rises to $1.32; GBPUSD at 2 ½-mth high

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EURUSD was lifted by an improved market sentiment supported by slightly better-than-expected euro-zone manufacturing activity in January as well as a successful Portuguese debt auction. Meanwhile market talk continues to swirl around a Greek debt deal soon, which helped support the euro. EURUSD retraced Tuesday’s losses to rise to 1.3034 in the European session from 1.3201.

Sterling hit a two-and-a-half month high versus the dollar after a jump in January manufacturing PMI which rose to 52.1 from a previous 49.7. This is the highest level since May 2011 and eases concerns of the UK falling into a recession. GBPUSD soared to 1.5865 from a low of 1.5705.

EURCHF hovered around the 1.20 CHF floor imposed by the Swiss National Bank on September 6 to cap franc strength. Euro fell even further earlier in Asian trading to reach 1.2029.

USDJPY continued to decline to reach a new three-month low yet again at 76.01. This is the lowest level since October 31 when the Bank of Japan intervened in the currency market to cap yen strength.

AUDUSD rose to a three-month high boosted by risk appetite after Chinese PMI lifted the risk sensitive aussie. China is a major trading partner for Australian. AUDUSD rose to 1.0713 from the 1.0568 low early in the European session.

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